Primary Principle – Taxes should be used primarily to fund government operations and not for economic incentives. Too often tax credits have unintended consequences and fail to stimulate the economy.
Personal Income Tax
Eliminate AMT and all tax snack bars. Tax credits while those for race horses benefit the few in the expense for this many.
Eliminate deductions of charitable contributions. Must you want one tax payer subsidize another’s favorite charity?
Reduce the youngster deduction the max of three the children. The country is full, encouraging large families is get.
Keep the deduction of home mortgage interest. Buying a home strengthens and adds resilience to the economy. When the mortgage deduction is eliminated, as the President’s council suggests, a rural area will see another round of foreclosures and Online GST Return Filing interrupt the recovery of market industry.
Allow deductions for educational costs and interest on student loans. It is effective for the government to encourage education.
Allow 100% deduction of medical costs and health insurance. In business one deducts the associated with producing goods. The cost of employment is partially the repair off ones health.
Increase the tax rate to 1950-60s confiscatory levels, but allow liberal deductions for “investments in America”. Prior towards 1980s salary tax code was investment oriented. Today it is consumption focused. A consumption oriented economy degrades domestic economic health while subsidizing US trading young partners. The stagnating economy and the ballooning trade deficit are symptoms of consumption tax policies.
Eliminate 401K and IRA programs. All investment in stocks and bonds in order to deductable merely taxed when money is withdrawn from the investment market. The stock and bond markets have no equivalent into the real estate’s 1031 give eachother. The 1031 real estate exemption adds stability to your real estate market allowing accumulated equity to use for further investment.
GDP and Taxes. Taxes can essentially levied being a percentage of GDP. Quicker GDP grows the more government’s capability to tax. More efficient stagnate economy and the exporting of jobs along with the massive increase in difficulty there does not way us states will survive economically with no massive trend of tax earnings. The only way you can to increase taxes end up being encourage a massive increase in GDP.
Encouraging Domestic Investment. Within 1950-60s tax rates approached 90% for top level income earners. The tax code literally forced financial security earners to “Invest in America”. Such policies of deductions for pre paid interest, funding limited partnerships and other investments against earned income had the dual impact of skyrocketing GDP while providing jobs for the growing middle-class. As jobs were come up with tax revenue from the middle class far offset the deductions by high income earners.
Today much of the freed income around the upper income earner leaves the country for investments in China and the EU at the expense among the US economy. Consumption tax polices beginning inside the 1980s produced a massive increase in the demand for brand name items. Unfortunately those high luxury goods were excessively manufactured off shore. Today capital is fleeing to China and India blighting the manufacturing sector in the US and reducing the tax base at a period of time when debt and an aging population requires greater tax revenues.
The changes above significantly simplify personal income in taxes. Except for comprising investment profits which are taxed at a capital gains rate which reduces annually based upon the length of capital is invested the number of forms can be reduced together with a couple of pages.